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Mortgage rates in Tennessee
Interest rates on a 30-year $300,000 conventional mortgage start at around 5.500%
If you have a credit score between 700 and 719 and can put 5% down, you’ll generally pay about 5.750% for a 30-year conventional loan with a fixed interest rate on a $350,000 home. But how much interest you pay for your Tennessee home will depend on several factors, including your credit score, loan amount and lender.
Rates were last checked on June 8 and are from the Consumer Financial Protection Bureau (CFPB) website.
Your credit score affects the rate you’ll get
People with higher credit scores generally get lower interest rates because lenders assume they’re less likely to stop paying a mortgage. Here are the most common interest rates in Tennessee by mortgage amount, according to the Consumer Financial Protection Bureau (CFPB).
| Credit score | $200,000 mortgage | $300,000 mortgage | $400,000 mortgage | $500,000 mortgage |
|---|---|---|---|---|
| 620-639 | 5.625% | 5.625% | 6.125% | 6.125% |
| 640-659 | 5.375% | 5.500% | 5.500% | 5.500% |
| 660-679 | 5.813% | 5.813% | 5.813% | 5.750% |
| 680-699 | 6.000% | 5.750% | 5.875% | 5.875% |
| 700-719 | 5.750% | 5.875% | 5.813% | 5.813% |
| 720-739 | 5.625% | 5.625% | 5.625% | 5.625% |
| 740-759 | 5.500% | 5.500% | 5.500% | 5.500% |
| 760-779 | 5.500% | 5.500% | 5.500% | 5.500% |
| 780-799 | 5.500% | 5.500% | 5.500% | 5.500% |
| 800+ | 5.500% | 5.500% | 5.500% | 5.500% |
*Based on a 10% down payment for a 30-year fixed-rate conventional mortgage
Interest rates vary by lender
Interest rates are affected by the economy and the federal funds rate, or the rate that banks charge each other for overnight loans. But they’re also affected by individual lenders, which can have differing overhead costs, profit margins and credit score requirements.
Comparing lenders can help you find the best deal. Select See rates to provide the company with basic property and financial details for personalized rates.
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Interest rates also vary by loan type
The type of loan you get can also affect how much you pay for your Tennessee home. 15-year mortgages generally offer lower interest rates than 30-year mortgages, and you’ll see different rates for conventional loans than government loans.
| Loan type | $200,000 mortgage | $300,000 mortgage | $400,000 mortgage | $500,000 mortgage |
|---|---|---|---|---|
| 15-year conventional | 5.000% | 4.750% | 4.750% | 4.750% |
| 30-year conventional | 5.750% | 5.875% | 5.813% | 5.813% |
| 15-year FHA | 4.000% | 4.000% | Not elegible | Not elegible |
| 30-year FHA | 5.375% | 5.438% | Not elegible | Not elegible |
| 15-year VA | 4.188% | 4.188% | 4.188% | 4.000% |
| 30-year VA | 5.563% | 5.500% | 5.438% | 5.438% |
*Based on a 10% down payment, fixed interest rate and 710 credit score
Research ahead of time to get the best rates
Lenders ultimately decide the rates you receive. The best way to get the best rate is to:
- Research loan products. Compare lenders and loans you could qualify for to find the most competitive interest rates.
- Polish your credit. Pay off debt to lower your debt-to-income ratio and raise your credit score to qualify for a better rate.
- Compare closing costs. Closing costs are added to your mortgage, and could run you anywhere from 1.25% to 1.87% of the final purchase price in Tennessee.
Home values in Tennessee are forecast to increase
Tennessee home values are going up. According to Zillow, the average home price in the Volunteer State increased by 16.1% in the 12 months prior to June 2021. And it appears the trend will continue well into 2022.
As Nashville continues to lead the way in buyer demand, other cities have seen their markets heat up, too. Forecasts by Zillow predict that home values across the state will increase anywhere from 3.4% to 18.6% by mid-2022. Leading the pack are Sevierville (16.8%), Memphis (18.2%), Primm Springs (15.7%), Lawrenceburg (15.6%) and Nashville (15.3%).
The average price of a Tennessee home is currently below $250,000, but how much you pay depends on the city, neighborhood and the quality of the home.
5 fast facts about Tennessee’s housing market
If you’re looking to buy a home in Tennessee, here are five facts to consider:
- The average home price in Tennessee is $236,323 as of June 2021, which is 21% less than the national average.
- The average monthly homeownership cost in Tennessee as of the 2019 US Census was $1,244 with a mortgage payment, which is $351 less than the national average.
- Closing costs in Tennessee are approximately 1.60% with taxes, with buyers paying an average of $3,790 to $2,584 on a typical home.
- The average property tax in Tennessee is 0.64%, according to SmartAsset, which is less than the national average of 1.07%.
- There are several homebuyer programs available to Tennessee residents. View them at the US Department of Housing and Urban Development (HUD) website.
Bottom line
Mortgage rates in Tennessee vary by loan type, and factors like your credit score and lender affect what rate you get. But factors like your credit score and lender affect what rate you get. Compare mortgage lenders and programs to find one that best fits your homeownership goals.
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